NBIX
Neurocrine Biosciences, Inc.
$170.88
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 40.6% below fair value
You pay
$170.88
Bear
$151.48
Fair
$287.46
Bull
$467.45
Bear
$151.48
-11.4%
13% stage 1 growth, 11% discount
Fair
$287.46
+68.2%
22% stage 1 growth, 11% discount
Bull
$467.45
+173.6%
29% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (22% base case)
Terminal Value % of EV
48%
Implied Market Multiple
27.5x
Market is pricing in (growth)
13.3%
vs 22.3% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $195.60 from 37 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $287.46 per share.
Warnings
Stock-based employee pay equals 46% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $195.60 (from 37 analysts). Our estimate is 67% above the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions